The Goldletter bulletin has published a note on junior mining firm Golden Arrow Resources Corp (CVE:GRG) highlighting the group's potential.
It has a target price of C$0.90 for the shares, against a current price of C$0.60, up 3.45% on the day.
The group is moving to establish two value streams - the first is the production start-up, within the next six months, of the Chinchillas silver deposit in Argentina, will be the first stream, creating yearly income for the firm.
A new subsidiary..
The second comes from the formation of a 100%-owned new subsidiary called New Golden Explorations Inc, which will seek a listing to access funding for future exploration.
Puna Operations Inc is the joint venture, formed to combine the firm's Chinchillas project with Silver Standard's producing Pirquitas operation.
First ore delivery to the Pirquitas mill is expected in the second half of 2018, with sequential ramp up through the remaining months of 2018.
Puna will produce lead, silver and zinc concentrates, eventually reaching planned life of mine annual average production of 8.4mln ounces of silver equivalent.
"Puna Operations offers a 8.4 million silver equivalent production for 8 years, and calculated at a silver price of US$19.50 per ounce represents US$11.38 billion in gross sales, resulting in a post-tax cash flow of US$267mln and an NPV (5%) of US$178mln," said the investment alert.
"It is to be noted that only 25 hectares of the Chinchillas Project has been explored in detail to date, and the remaining 1,978 hectares having remained under- or unexplored."
"Besides Puna Operations, Golden Arrow’s other properties, including the Pescado Gold Project, to be separated into New Golden Explorations, this could represent a significant added value...," the article added.
Exceeds annual output guidance..
Last month, Golden Arrow revealed it had exceeded annual production guidance last year.
The miner's Puna Operations joint venture produced 6.18mln ounces of silver in 2017, which exceeded even the upwards-revised production guidance the company had previously given.
Puna expects to produce 3 - 4.4mln ounces of silver next year, with cash costs per payable ounce sold ranging from US$12.50 an ounce to US$15.
"....the announced US$1million exploration program at its Pescado Gold project in San Juan Province, follows the recent business agreement with SSR Mining to combine its Chinchillas Silver-Lead-Zinc Project with SSR’s Pirquitas Silver-Zinc mining operation in the formed Puna Operations," said the article.
"This strategical step has significantly exceeded Golden Arrow’s potential as a junior silver producer, enhanced by its strong financial position after having received C$17.8 million for the Pirquitas payment."